VAT (Hansard, 26 October 1993)

§ Mr. Alfred Morris
To ask the Chancellor of the Exchequer what representations he has had from British Airways and other airlines in regard to VAT on domestic air fares; and if he will make a statement.

§ Sir John Cope
A number of such representations have been received. It would be inappropriate for me to comment in advance of my right hon. and learned Friend's forthcoming Budget statement.

§ Mr. Cormack
To ask the Chancellor of the Exchequer what would be the yield if VAT at 5 per cent. were levied on all items which are currently zero rated or exempt other than food.
572W

Number of taxpayers by range of

Gross income¹ Taxable income²

over 80,000 170 140

Total taxpayers 24,800 24,800

¹ Gross income is defined as total income for income tax purposes. It excludes income from certain social security benefits and some investment income such as National Savings Certificates.

² Taxable income is defined as gross income for income tax purposes less those allowances and reliefs which are available at the taxpayer's marginal rate.

§ Mr. Dewar
To ask the Chancellor of the Exchequer, pursuant to his answer of 25 February,Official Report, column 683, what estimate he has made of the effect of increases on the lower rate band of tax, in 1994–95.

§ Mr. Dorrell
Estimated costs compared with the statutory indexation of allowances and with the lower rate band width of £3,000 announced in the March 1993 Budget are in the table.

§ Sir John Cope
The publication "Tax Ready Reckoner and Tax Reliefs" shows the cost of not applying VAT at the standard rate to those goods currently zero rated or exempt. Although such a calculation may be misleading, adding together the figures for 1993–94 for all items in these groups other than food comes to £17.8 billion. It is not possible to calculate pro rata the figure for exempt goods but 5 per cent. on zero rated items other than food would be expected to raise £3.0 billion. These estimates take no account of behavioural changes.

§ Mr. Marlow
To ask the Chancellor of the Exchequer what assessment has been made of the revenue to be gained from imposing VAT on the footwear and clothing of women whose size enables their clothing to be free of VAT.

§ Sir John Cope
[holding answer 25 October 1993]: The law provides that articles designed as clothing or footwear for young children and not suitable for older persons are zero rated. Although certain adults may be able to purchase certain items of zero rated clothing for themselves, we do not believe the VAT receipts forgone from these purchases to be large.

§ Mr. Marlow
To ask the Chancellor of the Exchequer what calculation he has made of the effective transfer of resources from families of children aged 10 to 16 years in the top clothing size quartile to families of children aged 10 to 16 years in the bottom clothing size quartile arising from the present VAT provisions.

§ Sir John Cope
[holding answer 25 October 1993]: None, as there is not the data on which to base a reliable calculation.

	Number of taxpayers by range of
	Gross income¹	Taxable income²
over 80,000	170	140
Total taxpayers	24,800	24,800
¹ Gross income is defined as total income for income tax purposes. It excludes income from certain social security benefits and some investment income such as National Savings Certificates.
² Taxable income is defined as gross income for income tax purposes less those allowances and reliefs which are available at the taxpayer's marginal rate.